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Sri Lanka to raise syndicated loan of $300 mln
2008-10-07 22:21:32

The Sri Lankan government said on Tuesday it was planning to raise $300 million (Rs 32 billion) through a syndicated loan in US dollars or other major currencies in international markets.

The offer comes just a few weeks before the presentation of the government’s 2009 budget in parliament. In a statement, the Central Bank of Sri Lanka (CBSL), acting as the government agency, said it was inviting proposals from selected banks/investment banks to offer their services to function as the Lead Manager for raising the proposed loan. The proposed syndicated loan of US$ 300 million is expected to have a maturity period of two years or more with a floating or fixed rate of interest, the Bank said.

The government has over the past two years often resorted to borrowings through foreign commercial loans or bonds. The statement said according to the 2008 budget, the government is authorized to borrow Rs. 708 billion to finance the budget.

“Of this amount, Rs. 460 billion (Rs. 323 billion from domestic sources and Rs. 80 billion from foreign sources) amounting to approximately 65%, has been raised by the government so far. At the same time, a few other loans amounting to approximately Rs. 16 billion are presently being negotiated. Accordingly, a further amount of Rs. 232 billion is available to be borrowed within the approved limits,” the statement said.
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It said these funds would be used for financing of the ongoing infrastructure projects. “With this additional borrowing, the government is of the view that there will not be any further need for foreign currency borrowings this year. After taking the above foreign currency borrowing, as well as the other expected borrowings during the rest of the year, into consideration, the Debt/GDP ratio is estimated to be at the level of 78.5% at the end of the year 2008, as against the ratio of 85.8% at the end of the year 2007,” the Bank statement added.

 
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